Question

C. 5200 difference between the debit and credit comes of the United Trial Balance D. 5200 of prepaid insurance 31. When closing entries are made: A. All ledger accounts are closed to start the new accounting period. B. All temporary counts are closed but not the permanent accounts. C. All real accounts are closed but not the nominal accounts D. All permanent accounts are closed but not the nominal accounts 32. Closing the temporary accounts at the end of each counting period does all of the following A. Serves to transfer the effects of these accounts to the owner's capital B. Prepares the withdrawals account for use in the next period. on the balance sheet C. Gives the revenue and expense accounts D. Has no effect on the owner's capital account. 33. The recurring steps performed each reporting period, starting with analyzing and recording transactions in the journal and continuing through the postclosing trial balance, is referred to as A. Accounting period. B. Operating cycle. C. Accounting cycle. D. Closing cycle. 34. The assets section of a classified balance sheet usually includes: A. Current assets, long-term investments, plant assets, and intangible assets. B. Current assets, long-term assets, revenues, and intangible assets. C. Current assets, long-term investments, plant assets, and equity D. Current liabilities, long-term investments, plant assets, and intangible assets. 35. 76. Two common subgroups for liabilities on a classified balance sheet are: A. current liabilities and intangible liabilities. B. present liabilities and operating liabilities. C. general liabilities and specific liabilities. D. current liabilities and long-term liabilities 36. The special account used only in closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to or subtracted from the owner's capital account is: A. Income Summary account. B. Closing account. C. Balance column account. D. Contra account. 37. J. Awn, the proprietor of Awn Services, withdrew $8,700 from the business during the current year. The entry to close the withdrawals account at the end of the year is: A. Debit. Awn, Withdrawals $8,700; Credit Cash, 58,700 B. Debit J. Awn, Capital 58,700, credit J. Awn, Withdrawals 58,700 C. Debit. Awn, Withdrawals $8,700, credit J. Awn, Capital $8,700 D. Debit J. Awn, Capital $8,700, credit Salary Expense $8,700 38. A company had revenues of $75,000 and expenses of $62,000 for the accounting period. The owner withdrew $8,000 in cash during the same period. Which of the following entries could not be a closing entry? A. Debit Income Summary $13,000; credit Owner's, Capital S13,000 B. Debit Income Summary $75,000; credit Revenues $75,000. C. Debit Revenues $75,000; credit Income Summary $75,000. D. Debit Income Summary $62,000, credit Expenses $62,000. 39. The J. Godfrey, Capital socount has a credit balance of $17,000 before closing cotries are made. In total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9.000, what is the ending balance in the J. Godfrey, Capital account after all closing entries are made? A. S 8,000. B. $15,400. C. $23,400. D. $17,000. 40. Which of the following statements is true? A. Owner's capital must be closed each accounting period. B. A post-closing trial balance should include only permanent accounts. C. Information on the work sheet can be used in place of preparing financial statements. D. Closing entries are only necessary if errors have been made Page 4 of 4

Answer 1

31) When closing entries are made:

Ans: ( B) All temporary accounts are closed but not the permanent account.

Explanation:

1) Closing entries are prepared to close the temporary accounts such as Revenue, Expense and Dividend.

2) They are called temporary account because these account does not roll over for next period.

3) These accounts are closed so that revenue and expense of each period is recongnized separately.

4) All the balance sheets accounts are permannent accounts as they roll over for next accounting period.

5) Closing entries does not have any impact on permanent account.

Hence,

Choice ( b) is the correct answer.